It's almost 10 years since I launched the Runnymede Trust report on British Muslims and Islamophobia. Back then, they seemed an almost invisible minority. Today, with senior Muslim representatives regularly visiting Downing Street and liberal factions straining to respect and understand Islam, British Muslims are at a point where they could exert an unprecedented level of influence on society. But there is little consensus among the various Muslim communities in Britain about what to make of their political capital. Without a common agenda, there is a danger that any political recognition will simply lead to token gain without any economic or social progress at street level. The problem is that respectfulness towards Muslims is tinged by fear. How often, during the recent debate on the supposed blasphemy of Jerry Springer: The Musical, did Christian lobbyists mutter darkly: suppose this musical had mocked the Prophet Muhammad? Implied was the notion that Muslims are less tolerant, more desperate, more prone to violence. It is with this in mind that government policy is forged, you suspect. It's this which accounts for the vigorous but not altogether sincere lip service paid to Muslims. Don't mess with these people.

Such an attitude, however, does nobody any favours, least of all Muslims, whose basic needs it fails to address. What hasn't changed much in the last decade are the high levels of unemployment and discrimination that Muslims face. Bolstered by unprecedented levels of global hostility, the assertion of Muslim identity is a symptom of the alienation and disadvantage that British communities face.

Undoubtedly, the neglect of Muslims in British race laws is a major omission. When the legislation was first drawn up, a distinction, possibly arbitrary, was made between mono-ethnic and multi-ethnic faiths. This enabled Sikhs, Jews and Rastafarians to be protected but excluded all other faiths. With Muslims now making up our largest minority, this requires redress. One wonders though, whether it might be better to redefine the terms of the original race relations legislation to ensure that Muslims are included? After all, race, religion, ethnicity and national origin are fluid concepts. Surely, the religious component of an Asian Sikh's identity is no more or less significant than that of an Asian Muslim?

Instead, the government has chosen to extend religious laws alongside race legislation. For example, the proposed offence of incitement to religious hatred will extend the current provision on incitement to racial hatred in the Public Order Act of 1986. While this goes some way to closing the loophole, it also creates precedence for a whole canon of legislation specifically around religion.

Pursuing minority rights along religious lines is hazardous. Religion is too much of a contested value in Britain for it to form an effective route for the protection and enhancement of Muslim values. Here, like much of Europe, Christianity has given way to secularism. The Church has become an architectural rather than spiritual structure, its overall influence on daily life much diminished. Establishment religion in the UK doesn't extend much beyond the occasional outspoken remark by a bearded archbishop or the obligatory scheduling of Songs Of Praise. It's discreetly understood that religion's patriarchal, illiberal and arbitrary hierarchical structures are archaic and outdated and don't sit comfortably with our ideals of democracy and equality.

With less than 10% of the British public now regularly attending church, Christian leaders might be tempted to form alliances with their Muslim counterparts to shore up their own dwindling faith base. But while the emergence of Muslim identity provides an opportunity for Christians to assert their presence too, it would simply raise demands from many different minority religions that would be at odds with modern democratic life. As well as the Christian reaction to Jerry Springer: The Musical, the Sikh response to Behzti demonstrates the heightened sensitivities around race and religion. Talk of a religious discrimination bill has encouraged other minority groups that this is how best they can assert themselves. But is this really to the good?

It's important to remember that the brittle, nervous delicacy with which Muslims are regarded by both liberals and the establishment has an underside of tacit contempt, occasionally manifested in the form of intemperate outbursts about the "backwardness" of Islam. There is a gap to be breached - not by legislation but by a fundamental shift in attitude. It is vital, on the one hand, that Muslims exert the influence they potentially enjoy to press for practical improvements, the basic, bread and butter fare of jobs, enterprise and industry. It's also imperative that policymakers demonstrate the imagination to grasp that the way ahead for Muslims in Britain is not to cogitate anxiously on their religious identity but to remove the barriers of fear, suspicion and antagonism which bar them from taking their proper working place in British society.